Microeconomics (Christopher T.S. Ragan) (z-lib.org)

The Present Value of a Stream of Future Sums Now consider the present value of a stream of payments that continues for many peri ...

AVC, AFC, and ATC, as we did in the short run; in the long run, there is only one LRAC for any given set of input prices. The Sh ...

Table15-3 The Present Value of a Stream of Future Sums In general, if is the MRP that occurs t years from now, if i is the inter ...

equipment is useful only when the volume of output that the firm can sell justifies using that equipment. For example, assembly ...

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Such diseconomies may be associated with the difficulties of managing and controlling an enterprise as its size increases. At fi ...

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returns. In the short run, at least one factor is fixed, and the law of diminishing returns ensures that returns to the variable ...

Summary The concept of present value can be confusing at first, but you should now see the straightforward way to evaluate a str ...

Figure 8-2 LRAC and SRATC Curves Each SRATC curve is tangent at some point to the LRAC curve. With given technology, each plant ...

15.3 The Demand for Capital As we said earlier, a firm’s demand for financial capital comes from its demand for physical capital ...

Figure 8-3 The Relationship Between the LRAC Curve and the SRATC Curves To every point on the LRAC curve, there is an associated ...

profit-maximizing firm is simple: If the PV is greater than or equal to the purchase price, the firm should buy the capital good ...

Lessons From History 8-1 Jacob Viner and the Clever Draftsman Jacob Viner (1892–1970) was born in Montreal and studied economics ...

Figure 15-2 The Firm’s Optimal Capital Stock maximizing firm will go on adding to its stock of capital until the present value o ...

craftsman and to follow my instructions, absurd though they might be.” Viner’s mistake was to require that the draftsman connect ...

revenue product of capital—the annual MRP generated by each computer is less than for the previous one. The third column compute ...

2 Economists shift back and forth between speaking in physical terms (“increasing returns”) and cost terms (“decreasing costs”). ...

The future MRPs can also increase if the market price for the firm’s product increases (or if demand for its product increases a ...

8.2 The Very Long Run: Changes in Technology In the long run, profit-maximizing firms faced with given technologies choose the c ...